thedons

So is my term deposit not guaranteed, ? ?
I moved from Esanda because of this! Thought money was safe in one of the big four and ( guaranteed )

Pollyana

A large amount of country Qlders still do keep it under their beds...........

thedons

anyone???

MartinH

My point (which was actually a serious one) is that there are rules and regulations in modern industrial economies that prevent financial institutions from putting their investors money unnecessarily at risk.....BUT those regulations cannot make allowances for the herd mentality of the public which has people queueing outside banks to withdraw their funds because they heard that banks are unsafe.

So it depends whether you are a sane financially literate human being (in which case you should leave your money where it is) or a sheep (in which case you should take it out and spend it - because they will probably steal it from under your bed).

The Bloke

Funny, that's just what they said before the start of the Great Depression in 1929.

longreach

The government has injected $2bn propping up aussie banks this year alone.

They will use the future fund to ensure it doesn't happen.

Hotton

Please explain more i hope you are 100% Were did you get the info
from ? Is it government backed ? Cheers

geordie downunder

You can go to a bank annual report and get fact,not crowd nonsense.

IE NAB has $425 billion in loans and 0.32% of them are non performing .

Profit for last year was$4.47 billion after tax.

As far as I know the govt has not put $2 billion in,it wouldn't keep them running for 1 day,the future fund is not used to prop up banks.

From memory the UK guarantee the first 30K (pounds),in the US then FDIC guarantees the first 100K (US$).

The secret is if you spend 2 mins looking at an annual report you will know more about that company than 99.5% of people.

No guarantees on money in OZ banks...Reporting season starts again for CBA,suncorp,St george in August.ANZ,Westpac and NAB in November,I'm not expecting any huge writedowns.

They are well run and strong banks and they comply with all GAAP and basel2 accounting standards,however that does not mean they cannot tell lies in annual reports.

Banks and analysts are expecting profit growth to come down to single figure growth over the coming 2 yrs.

They are very big fish in a very small sea,I wouldn't worry.An investment bank is totally different from a savings bank.

Hotton

Yer thanks for that i think most people did trust banks until this Northern Rock mess cheers

longreach

http://www.theword.ezyzine.com/ThreadView.aspx?tid=5468

The problem with annual reports are that they are historic in nature and do not necessarily portray the current position. The Opes Prime writedowns would not be in the last ANZ annual report for example. Do you not expect them to mention this writedown in their upcoming annual report?

Spending 2 minutes looking at an annual report will tell you nothing in this current volatile climate.

While I do not expect any of them to go under, they are never the less feeling the squeeze, hence the latest round of rate rises independent of the reserve bank.

And if you think the federal government would let one of the big boys go to the wall then I think you are way off the mark, IMHO.

Hotton

Well i guess the answer is NO your cash in Australian banks is not
protected as it is in UK banks .I dont have a house to sell so no
risk there personally ,and what cash i do transfer is down to me
not a problem, you make the move you take the risk .And there is
a proposal only by the government i repeat proposal only
to try to get A$ 20.000 Protected in the near future
cheers thanks for replys

twhurl

What happens if you have an offset mortgage and the bank goes bust ?
ie : your mortgage is for $100k you have 50k in offset.
If the bank goes bust do you owe $50k on your mortgage ?

geordie downunder

Opes occured after the ANZ annual report is released and posted out in december along with dividends.They had a mention in the shareholder update posted out with the divi in the first week of july.

Profit for the 6months was down 7% after the writedowns and was just under
$2 billion,dividend was held the same as last year for the july payment.
The ASX will give company announcements on a daily basis,as will media releases from the company,profit warnings are price sensitive in nature and are released immediately,thus the articles in the newspapers when it occured.

The shonky margin lenders that borrowed money from ANZ used the shares owned by other people as security.The shares will be sold to recoup some (most?) of the losses.A court case will no doubt be the outcome unless ANZ settle out of court to avoid bad publicity.

They increased rates as the cost of money has gone up.Work on 60% of money is raised on depositors and 40% on wholesale (world) markets.The cost of both has gone up,especially the wholesale markets.

They work on a spread ,if they have no money to lend out there is no spread,the liquidity crisis has meant liquidity is not there,no money to lend.At the minute the reason you can get a good rate on a deposit is because they want money in,they are also raising money through hybrid securities,basically a preference share issue.

The annual report is an historic document,it is a precis.Constant disclosure rules mean daily updates on the business are always there,an important part of ASX listing rules is constant disclosure,all company info must be released to the market.

I said the future fund will not be used to prop up banks,I did not say the govt would not stand by the big 4.Why would they need to stand by them when they are all running at a profit.

CBA reports next month,WBC,NABand ANZ in November.

The company web sites and ASX will give you all info,as I said.

NedKelly

There is precedent for this in the UK when BCCI went bust. You would still owe $100k. Your $50k would be lost. Not sure about here though.It has never been tested.

haggis supper

As I work for NAB, I'd be interested in why you think they are the least safe ?